Property prices across Melbourne have weakened for an 8th consecutive month, putting an end to the 5-year property boom.
So how should you respond to such news if you are planning to sell your property?
Jim McDonald, the owner of JMAC Vendor Advocacy, doesn’t mince his words:
Vendors need to be very careful. These are the exact market conditions we’ve been warning about for some time. In particular DO NOT automatically enter into an agreement with a real estate agent to Auction your house. An auction works well for a vendor when the price is rising. However, this is not neccessarily the case when the market is flat or falling.
Vendors would be wise to pay attention to Jim’s words.
Complicating matters is that real estate agent will generally ALWAYS benefit from holding an auction. They benefit from Auctions as:
- the vendor has to commit to the sale of the property early. They ‘invest’ money in marketing and other expenses so that if they don’t sell, they stand to lose tens of thousands of dollars,
- the auction process can take as little as 6 weeks from start to finish. A real estate agent can better manage their time and resources when the sale process is rigid and fixed.
However, auctions are not always the best way to sell a property. If the market is stagnant or falling, or if your property does not stand out from the competition, a private sale is likely to get a better result than an auction.
In addition, if managed carefully, selling a property by private sale can provide you with the opportunity of ‘testing’ the market before fully committing to a sale. A Vendors Advocate is the perfect person to manage such a process.
Vendor advocacy is perfect for a vendor who does not want to immediately commit to an auction.